China trade data for May shows economy is back on track

Monthly China trade figures, released a short time ago, have revealed another large trade surplus for the world’s second-largest economy.

China’s trade surplus widened to $US78.6 billion in May, up from $US51.12 billion in April. Beating most expectations.

This compares to a trade deficit in the United States of $87.1 billion. Of note, China’s exports to the United States in the first five months of 2022 have increased 12.9% year-on-year, in yuan terms.

Exports dramatically increased by 16.9% vs May 2021, doubling consensus expectations.

Imports also increased by 4.1% in May. The first month-on-month increase the county has posted in almost one year.

The exports acceleration has been linked to factory reopenings as lockdowns have eased, along with a reduction in supply chains bottlenecks.

But with many COVID-19 restrictions still in place during May, economist are broadly optimistic that the growth can continue into the remainder of 2022 if COVID restrictions continue to ease.